A new research report from research and consulting firm RBR argues that banks in the USA should take advantage of the full power of the EMV chip.

The report, EMV Chip Applications: A world of opportunities, recommends that the USA should migrate to full chip and PIN from the outset, rather than go for the partial solution of chip and signature, or an online-only infrastructure, advocated by some US stakeholders. Full migration will enable the USA, not just to reduce fraud, but also to build an infrastructure capable of supporting new and added-value applications in the future.

There are a number of technology trends, reviewed in the report, that are critically dependent on the EMV chip. One example is display cards – these are conventional plastic cards with the same payments functionality but they include an LCD display and one or more touch-sensitive buttons on the card. A popular use of display cards is that of authentication tokens. The report argues that display cards are an excellent example of how technological advances can extend the life of an existing infrastructure – in this case card payments – far longer than conventional wisdom would suggest.

An interesting trend that relates to EMV is the rise of mobile payments. Despite the increasing importance of mobile phones for online banking, e-commerce, person-to-person payments and as portable EFTPOS terminals, their use as replacements for plastic cards for payments at the PoS may not become widespread for many years to come. The report argues that in the interim, global EMV chip infrastructure can be leveraged to turn the threat of the mobile phone into an opportunity for the existing card payments industry.

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